Peels come in many varieties. There are peels containing small particles or gentle enzymes that you can do at home. These kinds of peels remove dead cells on the skin surface to make it smoother. There are also chemical peels that use different kinds of acids. Chemical peels can remove the whole outer layer of the skin. They are called ablative peels (ablative means removal or destruction). As the skin heals, there will be a formation of new skin cells both in the deeper layer (dermis) and outer layer (epidermis) of the skin. Chemical peels are used to make the skin tighter and younger-looking and to stimulate the formation of collagen.
Reference:
Ganceviciene R. et al, Dermato endocrinol. 2012;4(3):308–319.